Soldiers recovered the bodies of at least 21 Abu Sayyaf gunmen after a clash in the village of Mabahay, near the town of Talipao on Thursday, said the sources, who asked to remain anonymous.

They said troops also arrested four suspected Abu Sayyaf guerrillas in a raid in the provincial capital on Thursday night.

The self-styled Muslim separatist group still holds US hostage Jeffrey Schilling and a Filipino divemaster, Roland Ullah, two months into a massive military rescue operation ordered by President Estrada.

The operation has led to the freeing of two Frenchmen, three Malaysians, and 12 Filipino Christian preachers.

Among the slain guerrillas was Patta Arola, one of a small group of Abu Sayyaf gunmen who raided the Malaysian island resort of Sipadan on April 23 and snatched 21 hostages including Ullah, the military sources said.

The military said the gunmen ransomed off the rest of the hostages, who include westerners, for millions of dollars.

Schilling, of Oakland, California, was kidnapped separately on Aug. 28.

MILF

COTABATO (AFP) - An attempt by more than 150 Muslim separatist guerrillas to attack a southern Philippines town Friday and kidnap a businesswoman was scuppered by the military and police.

Muslim Moro Islamic Liberation Front (MILF) guerrillas crept into the town of North Upi in Maguindanao province before dawn and seized ethnic Chinese businesswoman Suken Chio, military spokesmen said.

Troops, police and government militiamen responded, sparking a two-hour gunbattle in which two Mg-520 helicopter gunships were used to blast MILF positions during the battle.

At least five MILF fighters and one civilian were killed, while two civilians and three government troops were wounded.